The reason James Cagney looked so good in boxing films was that he was actually an accomplished amateur boxer, once placing second as a lightweight in a New York state boxing tournament.
The night club flashback scene is actually a clip from Queen of the Night Clubs (1929) and shows Texas Guinan and George Raft. That film is presumed lost and this is the only known footage from that early musical.
What aided Jimmy Cagney's ring performance (besides the above mentioned amateur boxing experience he held) was that his opponent 'Al West' was played by stuntman extraordinaire Harvey Parry, who himself was an AUU Boxing Champion. During the silent era Parry stunt doubled for almost every Hollywood star (except Buster Keaton ) includingDouglas Fairbanks. Because the studio always claimed Fairbanks did his own stunts, Harvey Parry 'kept quiet' on the issue for over forty years.
After the fight, Jim goes to the Stork Club with a group and there it is mentioned that Japan is at war. They are referencing Japan's invasion of Manchuria, in northeast China, that began on September of 1931.